Europe commences Intel investigation

Are its marketing, P4 licensing programme anti-competitive?

The European Commission's antitrust watchers are drawing a bead on Intel over the way it has licensed its Pentium 4 interface to chipset manufacturers and markets its own products.

The Commission enquiry will also take in the chip giant's broader business practices - including subsidising third-party advertising that displays the 'Intel Inside' logo and, where appropriate, irritating jingle - in an effort to determine whether it acts to hamper competition.

News of the enquiry was leaked to the Wall Street Journal. As yet, the EC has made no comment on the case. But an Intel spokesman did confirm that the EC has requested the chip maker explain its actions. "We have been co-operating with the commission on its request," he said. "We believe our business practices are fair and lawful."

If the EC decides otherwise, it has powers to fine Intel up to ten per cent of its annual sales. Such hard-hitting fines are rare, however.

The action will certainly be watched closely by VIA, which is currently negotiating to get Intel's permission to launch a chipset for the P4. VIA reckons it has the right to do so through intellectual property assets acquired through its purchase of S3's graphics chip operation, but wants Intel's say-so anyway.

At this stage, VIA has no comment to make on the case, a spokesman told us. However, a report on Reuters suggests the company has supplied the EC with information.

That, and the fact that Intel has already survived a similar probe by the US Federal Trade Commission, suggests Intel may not have too much to worry about. On the other hand, Europe's Competition Commissioner, Mario Monti, is a bit of a stickler for these things. Last week, he said the Commission's investigation of Microsoft's alleged trust-like behaviour may be expanded.

The FTC investigation was closed last September after three years without so much as a reason why, which suggests the pair settled the matter out of the public gaze. ®